The U.S. Justice Department charted a legal course last week that could produce a final decision on the constitutionality of the Patient Protection and Affordable Care Act in the heat of the 2012 presidential campaign.
Attorneys for the Justice Department filed their formal petition Aug. 28 for oral arguments before the U.S. Supreme Court to appeal a decision from Atlanta's 11th U.S. Circuit Court of Appeals that the reform law's mandate for individuals to purchase private insurance was unconstitutional. That same day 26 state governments, a national employers' rights group and two private citizens—who all oppose the reform law—appealed different aspects of the same decision.
If the Supreme Court grants an appeal during its next spring term, as is widely expected, legal experts said the high court justices would likely decide the fate of one of President Barack Obama's signature domestic issues by the end of June 2012.
“I'm sure all sides would like to see this issue dealt with prior to the national elections, because it's such a significant issue,” said James Napoli, a senior counsel with law firm Proskauer Rose with expertise in the reform law.
The Atlanta court released a 300-page decision Aug. 12 that found the law's requirement for nearly all Americans to buy health insurance by 2014 was unconstitutional, which is what the Justice Department is appealing. But the circuit court also ruled that the rest of the reform law should be allowed to stand without the individual mandate, which is what critics of the law want changed.
The National Federation of Independent Business, along with private citizens Kaj Ahlburg of Washington state and Mary Brown of Florida, say that Congress itself said the mandate was “essential” to the law, and that government lawyers have conceded as much in oral arguments.
Greg Katsas, a Jones Day attorney representing the federation, said the reform law's requirement that insurance companies issue policies to virtually anyone who applies would become dysfunctional without the corresponding requirement that nearly everyone buy insurance. “The question is, if Congress couldn't have the mandate, would they want that dysfunctional and unsustainable scheme? The answer seems, pretty clearly, no,” he said.
A Justice Department official who spoke on condition of anonymity with reporters on a conference call Sept. 28 said the mandate is essential to the law's provisions on private insurance because without it, “people could theoretically buy insurance on the way to the hospital.”
The case might be complicated by the question of whether the mandate is actually a tax, since the penalty for failing to buy insurance is enforced by the IRS as an income-tax penalty.
On Sept. 8, the 4th U.S. Circuit Court of Appeals in Richmond, Va., dismissed a lawsuit challenging the law after concluding that the mandate was a tax, and that the federal Anti-Injunction Act prohibits using the courts to challenge federal taxes before they have been paid. The court ruled that no one would have standing to challenge the mandate because no taxes could be paid until 2014.
While critics of the law oppose that reasoning, so does the Obama administration, because a Supreme Court finding that the mandate is a tax would essentially delay a final ruling on the reform law for at least another two years, the Justice Department official said.
Meanwhile, legislatures, governors or attorneys general with 26 states argued in their Supreme Court appeal of the Atlanta court's decision that the reform law includes an unconstitutional requirement that forces states to expand their costly Medicaid programs.
The reform law forces states with Medicaid programs to accept beneficiaries with incomes less than 139% of the federal poverty level by 2014, and to expand the number of offered Medicaid services. States that don't comply could lose all federal Medicaid funding—typically more than $1 billion a year each.
Although the coercion argument has been rejected by every federal judge that has heard it, Florida Attorney General Pam Bondi was confident of a different result from the high court. “If we don't participate in this, we lose all Medicaid funding. And if that's not coercion, I don't know what is,” Bondi said in an interview.
The Justice Department official who spoke with reporters Aug. 28 said the Medicaid-coercion argument has no merit. “The problem with that argument is that Medicaid is voluntary and it is a well-established legal principle that states cannot accept the money and not abide by the terms by which the money was supplied,” he said.
